Was anyone ever held accountable in Ireland for the 2008 crisis?

armabelle

I am not Irish so don't know much about the crisis here in 2008. I did read that Ireland was one of the worse off countries as a result of the crisis. I was just wondering if anyone was actually persecuted or held accountable for the loss to the economy after the crisis?

mahoganygas

The main problem with holding people accountable is that there was no single overriding reason why Ireland entered a recession in this period.

There certainly were some domestic issues and blame can be laid at the door of politicians, property speculators and bankers.

But by far the largest factors which affected the Irish economy were as a result of foreign influences.
A lot of blame is placed at the sub-prime mortgage fiasco in US banks. This is seen as the catalyst that started the downfall of the global economy. This week Goldman Sachs admitted that they were wrong in how they packaged and sold mortgage backed and asset backed securities to investors. They paid billions in fines (around $5bn I think?) but to this day no individual has been found guilty of wrongdoing and imprisoned.

armabelle

mahoganygas wrote: »

The main problem with holding people accountable is that there was no single overriding reason why Ireland entered a recession in this period.

There certainly were some domestic issues and blame can be laid at the door of politicians, property speculators and bankers.

So by saying this you are saying that there are no "people" to blame, just institutions? How can that be? Surely people set up institutions. If a building falls down, those that built it are responsible. Similarly, if I buy a toaster and it breaks after a week, the company would be giving me a new one so I am not out of pocket. Isn't the loss to the Irish economy and everyone in it as a result of the crisis so big that there must be someone that is held accountable?

punisher5112

Bankers that caused most and developers along with corrupt politicians....

Nobody has had to answer or seen any jail time.

Most are back making a fortune again anyway.

armabelle

punisher5112 wrote: »

Bankers that caused most and developers along with corrupt politicians....

Nobody has had to answer or seen any jail time.

Most are back making a fortune again anyway.

Really? That is awful. You Irish must be placid and peaceful people for this to happen and nobody go down. Was there a protest of some kind ever in Ireland about this when it happened? Did people even want justice?

mahoganygas

armabelle wrote: »

So by saying this you are saying that there are no "people" to blame, just institutions? How can that be? Surely people set up institutions. If a building falls down, those that built it are responsible. Similarly, if I buy a toaster and it breaks after a week, the company would be giving me a new one so I am not out of pocket. Isn't the loss to the Irish economy and everyone in it as a result of the crisis so big that there must be someone that is held accountable?

Well in those example you have given both the building company and the toaster manufacturer are institutions.
Who do you hold accountable? The individual bricklayer who placed a brick incorrectly? His supervisor? The Director of the company who wasn’t on site for the entirety of the building project? The owners of the building company?

You can see that it’s difficult to assign blame to any single individual. Also what are you blaming people for? “The 2008 crisis” is a very broad term. What factors caused the crisis and which factors just seemed to make it worse? Therein lies the problem with holding people accountable.

punisher5112 wrote: »

Bankers that caused most and developers along with corrupt politicians....

Nobody has had to answer or seen any jail time.

Most are back making a fortune again anyway.

Again, to my point above:
Specifically which bank officials, property developers and politicians can you prove are guilty of specifically which crimes?

ballyargus

The people in general seem to have been held highly accountable, by their own government as well as those wonderful folks in the IMF and the EU

mahoganygas

armabelle wrote: »

Really? That is awful. You Irish must be placid and peaceful people for this to happen and nobody go down. Was there a protest of some kind ever in Ireland about this when it happened? Did people even want justice?

There has been huge upheaval in the past 8 years. Fiana Fail, the party in government at the time were kicked out of office in the 2011 General Election. They went from 71 seats to 20 seats.
They received the brunt of the blame.

Additionally there have been attempts made to prosecute directors of Anglo Irish Bank. These cases are ongoing.

The Financial Regulator has been turned on it's head and new laws have been introduced to ensure reckless lending behavior doesn't happen again at Irish Banks.

I wouldn't say that we are placid about it. There has been a lot of anger and hurt over the financial crisis. I think that one of the reasons that we appear placid is because the main causes of the collapse of the economy were because of external factors which we had little to no control over. Ireland is a very open small economy which means we are particularly susceptible to economic shocks if the economies of our main trading partners (UK, EU, US) start to suffer. Keep in mind that the 2008 financial crisis affected and still affects hundreds of countries around the globe.

Fr Tod Umptious

Three local factors that affected the crash were

Reckless lending by banks.
Reckless borrowing by consumers.
Over reliance on revenue from construction by the government at the expense of other parts of the economy.

None of the above are criminal but all are incompetent.

The FF government were punished in the 2011 election and since then the regulations around borrowing and lending have been tightened.

No one criminal action by an individual or individuals caused the crash.

KingBrian2

Their is a trial ongoing of the leading bankers who are alleged to have committed fraud.

Godge

armabelle wrote: »

So by saying this you are saying that there are no "people" to blame, just institutions? How can that be? Surely people set up institutions. If a building falls down, those that built it are responsible. Similarly, if I buy a toaster and it breaks after a week, the company would be giving me a new one so I am not out of pocket. Isn't the loss to the Irish economy and everyone in it as a result of the crisis so big that there must be someone that is held accountable?

Your examples aren't great. The responsiblity doesn't necessarily lie with the builder or the manufacturer.

The building could fall down because of an earthquake.
You could have stuck a fork in the toaster.

We can say the banks failed, we can say government revenue collapsed. However, we need to understand how and why, before we can apportion blame. Then we need to establish whether it was avoidable, whether it was incompetence, or whether it was corrupt.

There is a certain narrative in Ireland among the protesting class that it was all the fault of corrupt bankers and politicians. Looking at it objectively, that hasn't been demonstrated to have been the case.

Fr Tod Umptious

Godge wrote: »

Your examples aren't great. The responsiblity doesn't necessarily lie with the builder or the manufacturer.

The building could fall down because of an earthquake.
You could have stuck a fork in the toaster.

We can say the banks failed, we can say government revenue collapsed. However, we need to understand how and why, before we can apportion blame. Then we need to establish whether it was avoidable, whether it was incompetence, or whether it was corrupt.

There is a certain narrative in Ireland among the protesting class that it was all the fault of corrupt bankers and politicians. Looking at it objectively, that hasn't been demonstrated to have been the case.

I think the actions of the government were certainly avoidable if you look at them in isolation.

But you cannot look at them in isolation.
Any sign of a pull back in public spending or any attempt to put a lid on an overheating economy would likely have resulted in an election loss.

As we have seen this year the Irish electorate are fickle, throw them a bone, like FF did mid campaign about water charges, and they will be all over it.

The public are not without blame in the whole bloddy mess.

armabelle

mahoganygas wrote: »

Well in those example you have given both the building company and the toaster manufacturer are institutions.
Who do you hold accountable? The individual bricklayer who placed a brick incorrectly? His supervisor? The Director of the company who wasn’t on site for the entirety of the building project? The owners of the building company?

You can see that it’s difficult to assign blame to any single individual. Also what are you blaming people for? “The 2008 crisis” is a very broad term. What factors caused the crisis and which factors just seemed to make it worse? Therein lies the problem with holding people accountable.




Again, to my point above:
Specifically which bank officials, property developers and politicians can you prove are guilty of specifically which crimes?

it is difficult but surely for something like this the builders and institution/s should be blamed and fined instead of the tax payer?

Fr Tod Umptious

armabelle wrote: »

it is difficult but surely for something like this the builders and institution/s should be blamed and fined instead of the tax payer?

But blamed and fined for what ?

What law did they break ?

Many a good person in the building/property trade lost their livelihood over their own reckless actions, but they did nothing illegal.

armabelle

Godge wrote: »

There is a certain narrative in Ireland among the protesting class that it was all the fault of corrupt bankers and politicians. Looking at it objectively, that hasn't been demonstrated to have been the case.

how so?

armabelle

Fr Tod Umptious wrote: »

But blamed and fined for what ?

What law did they break ?

Many a good person in the building/property trade lost their livelihood over their own reckless actions, but they did nothing illegal.

instead of answering that, allow me to ask you the question: what did the Irish citizens actually lose as a result of the crisis?

Fr Tod Umptious

armabelle wrote: »

instead of answering that, allow me to ask you the question: what did the Irish citizens actually lose as a result of the crisis?

A lot of Irish citizens lost a lot of different things.

Some lost their family homes, others lost their jobs, others lost their savings, others had income reduced due to increased taxes etc.

armabelle

Fr Tod Umptious wrote: »

A lot of Irish citizens lost a lot of different things.

Some lost their family homes, others lost their jobs, others lost their savings, others had income reduced due to increased taxes etc.

so if any one of these things had happened to you, wouldn't you feel as though a crime has been committed against you?

Fr Tod Umptious

armabelle wrote: »

so if any one of these things had happened to you, wouldn't you feel as though a crime has been committed against you?

No not at all.

People lost their homes because they had unsustainable mortgages, or used their homes as collateral for other loans.

People lost their jobs because the domestic economy, build on a construction bubble, collapsed.

People lost their savings because they invested them in investments that failed, bank shares, developments, global stocks for example.

And everyone ended up paying more tax because of the shortfall as a result of the property collapse.

None of the above happened due to specific criminal acts.

Yes bankers are on trial, but for causing the crash, because individuals and banks alone did not cause the crash.

armabelle

Fr Tod Umptious wrote: »

People lost their homes because they had unsustainable mortgages, or used their homes as collateral for other loans.

People lost their jobs because the domestic economy, build on a construction bubble, collapsed.

Oh ok, well then great... then there are really no victims in the crisis and it is a beautiful world.

Fr Tod Umptious

armabelle wrote: »

Oh ok, well then great... then there are really no victims in the crisis and it is a beautiful world.

I don't understand what you ate saying.

Rather than asking rhetorical questions why don't you tell us what your opinion is

El_Duderino 09

It's too hard to quantify the damage done by each party. The banks packaging bad debt and selling than as good debt, was a problem. Some of it was irish, some was external.

How much of the blame lies with irish people's fundamental misunderstanding of economic cycles? Boom-bust. Everyone can't have a massive house and a holiday home. That's only for rich people and still everyone thought they could afford it.

In all the talk about the recession, never once have I heard the Irish people's role in it. Saving money went out the window. The only way to absolve the people of any blame is to compare them to children who were left unsupervised and they got into the drinks cabinet. Now they have the inevitable hangover and want someoneelse to be held accountable for their mistake.

It won't happen because people don't want to know who was responsible. Next time there's a few bob going around, the tradesman will be back out in his new Beemer and looking for property in the holiday destination of the day.

armabelle

Fr Tod Umptious wrote: »

I don't understand what you ate saying.

Rather than asking rhetorical questions why don't you tell us what your opinion is

What rhetorical question? I asked no question in my previous post, rhetorical or otherwise. I am glad that people weren't deceived by the institutions in Ireland and am glad that no crime was committed.

I never had an opinion which is why I wanted some more information. Generally speaking, if this happened in my country, I would feel like a crime had been committed against me because a crisis doesn't just happen... it is caused.

armabelle

Fr Tod Umptious wrote: »

I don't understand what you ate saying.

Rather than asking rhetorical questions why don't you tell us what your opinion is

have you seen this?

https://www.youtube.com/watch?v=fiCXsu_4BoA

armabelle

Fr Tod Umptious wrote: »

No not at all.

People lost their homes because they had unsustainable mortgages, or used their homes as collateral for other loans.

People lost their jobs because the domestic economy, build on a construction bubble, collapsed.

People lost their savings because they invested them in investments that failed, bank shares, developments, global stocks for example.

And everyone ended up paying more tax because of the shortfall as a result of the property collapse.

None of the above happened due to specific criminal acts.

Yes bankers are on trial, but for causing the crash, because individuals and banks alone did not cause the crash.

I actually came asking this question after reading this article

http://www.irishtimes.com/news/world/europe/conned-a-german-view-of-ireland-1.1454115

armabelle

El_Duderino 09 wrote: »

It's too hard to quantify the damage done by each party. The banks packaging bad debt and selling than as good debt, was a problem. Some of it was irish, some was external.

How much of the blame lies with irish people's fundamental misunderstanding of economic cycles? Boom-bust. Everyone can't have a massive house and a holiday home. That's only for rich people and still everyone thought they could afford it.

In all the talk about the recession, never once have I heard the Irish people's role in it. Saving money went out the window. The only way to absolve the people of any blame is to compare them to children who were left unsupervised and they got into the drinks cabinet. Now they have the inevitable hangover and want someoneelse to be held accountable for their mistake.

It won't happen because people don't want to know who was responsible. Next time there's a few bob going around, the tradesman will be back out in his new Beemer and looking for property in the holiday destination of the day.

so do you think people deserved what they got? I mean those kids with a hangover probably did don't you think?

armabelle

mahoganygas wrote: »

I wouldn't say that we are placid about it. There has been a lot of anger and hurt over the financial crisis.

Anger and hurt are emotions. You can be angry and placid or hurt and placid at the same time. I was just wondering what the publics reaction to it was at the time. Like did people protest or did they hold themselves accountable? I did not live in Ireland at the time so don't know.

Wanderer78

Good to see you 're still asking questions about the crash op, I feel a lot of the real causes are being swept under the carpet, and we 're looking at it eventually happening all again. I don't think we 've learned much at all from it. I'd highly recommend the work of American economist Bill black regarding the criminal aspect of financial fraud. I think he hits the nail on the head.

El_Duderino 09

armabelle wrote:

so do you think people deserved what they got? I mean those kids with a hangover probably did don't you think?

Are you happy to compare the nation to children?

We share responsibility. I don't know anything about blame or prison sentences. I think it's just silly talk. If we don't have an honest look at why it happened, we'll learn nothing.

More importantly, we have never had a discussion about what we should do next time there us money floating about. I'm going to be a complete heretic and suggest that next time there's money, we put some aside for a rainy day...

You don't trust the car salesman just because they said its a good deal. You don't trust an estate agent just because they said it's a good deal. Do you trust the credit salesman just because they said it's a good deal?

Wanderer78

El_Duderino 09 wrote:

More importantly, we have never had a discussion about what we should do next time there us money floating about. I'm going to be a complete heretic and suggest that next time there's money, we put some aside for a rainy day...

I personally think we need a public banking system and fast to try protect ourselves from future problems within the private banking system. Rainy day funds are highly debated but I'd rather see it being placed into a public bank if it was created

oscarBravo

armabelle wrote: »

so if any one of these things had happened to you, wouldn't you feel as though a crime has been committed against you?

It doesn't matter whether or not you "feel" a crime has been committed - unless you can demonstrate that a law has been broken, and that there is sufficient evidence to secure a conviction, then there's not much point complaining that nobody has been punished for the alleged crime.

Fr Tod Umptious

armabelle wrote: »

What rhetorical question? I asked no question in my previous post, rhetorical or otherwise. I am glad that people weren't deceived by the institutions in Ireland and am glad that no crime was committed.

I never had an opinion which is why I wanted some more information. Generally speaking, if this happened in my country, I would feel like a crime had been committed against me because a crisis doesn't just happen... it is caused.

Yes you may fell that a crime was committed and that the crash has a cause, but the cause was not a crime.

The cause was poor governance by the government, corporate mismanagement by the banks, personal mismanagement by individuals.

Wanderer78

Fr Tod Umptious wrote:

Yes you may fell that a crime was committed and that the crash has a cause, but the cause was not a crime.

I like the way Bill black puts it, basically we 've legalised financial fraud

Dohnjoe

armabelle wrote: »

I never had an opinion which is why I wanted some more information. Generally speaking, if this happened in my country, I would feel like a crime had been committed against me because a crisis doesn't just happen... it is caused.

The cause doesn't necessarily have to be criminal

The main hypothesis behind the sub-prime mortgage crisis which sparked the financial crisis was not moral hazard (criminal, bad behaviour) but "bubble thinking", i.e. very few, from the average punter on the street up to the largest institutions genuinely thought that house prices in the US were going to drop significantly

Houses prices had been steadily rising since the 40's, when they collapsed in 06/07, they exposed a system that depended on those prices rising and was not resilient as everyone thought to a sudden drop or change

It's only natural people just want old testament justice and someone to blame, even when specific crimes aren't necessarily the culprit or cause

armabelle

armabelle wrote: »

Really? That is awful. You Irish must be placid and peaceful people for this to happen and nobody go down. Was there a protest of some kind ever in Ireland about this when it happened? Did people even want justice?

There was no protest as working people picked up the tab, there are protests over water charges as people on welfare are expected to pay them.

armabelle

oscarBravo wrote: »

It doesn't matter whether or not you "feel" a crime has been committed - unless you can demonstrate that a law has been broken, and that there is sufficient evidence to secure a conviction, then there's not much point complaining that nobody has been punished for the alleged crime.

yes for sure but do you still get bank robbers nowadays? I mean, isn't white collar crime the crime of our generation? From the article I posted above there is a part that says:

On the tapes you can hear how high-ranking bankers make fun of the crisis. The €7 billion emergency assistance that they demanded from the government would be paid back when they have the money, the bankers agree jokingly – “in other words: never”.

Isn't that proof?

I doubt you will ever find a banker or politican with his hands in the cookie jar as they will always have some kind of an excuse.

armabelle

Augeo wrote: »

There was no protest as working people picked up the tab, there are protests over water charges as people on welfare are expected to pay them.

Are you making a joke?

armabelle

Wanderer78 wrote: »

I like the way Bill black puts it, basically we 've legalised financial fraud

ok so you do believe that fraud was commited. Isn't fraud a crime? Can you back this statement up somehow?

armabelle

Fr Tod Umptious wrote: »

Yes you may fell that a crime was committed and that the crash has a cause, but the cause was not a crime.

The cause was poor governance by the government, corporate mismanagement by the banks, personal mismanagement by individuals.

but if those individuals so wished, they may well have commited a crime and used the same excuse that you just gave for it couldn't they? I mean, if it is that easy? Blame it on mismanagement. Why not?

Eugene Norman

armabelle wrote: »

so do you think people deserved what they got? I mean those kids with a hangover probably did don't you think?

Would you buy a house now? There's a panic in the rental sector but house prices are increasing. Similar to 2008 except now we know that property does fall and the central bank is reining in the banks with income multiples. Without that prices would be back to 2006. Yet the rental sector is so badly managed that people still want to buy.

Back then except for a few heretics all economists, central bankers, real estate agents -- the supposed "experts" we're saying that there was no chance of a bust, that everything was fine, that the housing market needed fewer taxes etc. Ordinary people just wanted a house. If they are increasing at 20% year in price and the experts say this will continue indefinitely then joe soap will buy his shoe box for 400,000.

You might end up buying one for 300,000 if you stay as it probably beats rent.

Very little that was done was illegal. We reacted after th bust by voting for left wing, populists independents etc - which makes the country ungovernable. And now another crisis.

Eugene Norman

armabelle wrote: »

but if those individuals so wished, they may well have commited a crime and used the same excuse that you just gave for it couldn't they? I mean, if it is that easy? Blame it on mismanagement. Why not?

It would be nice if we could sue economists but then there would be no economists.

armabelle

El_Duderino 09 wrote: »

Are you happy to compare the nation to children?

We share responsibility. I don't know anything about blame or prison sentences. I think it's just silly talk. If we don't have an honest look at why it happened, we'll learn nothing.

More importantly, we have never had a discussion about what we should do next time there us money floating about. I'm going to be a complete heretic and suggest that next time there's money, we put some aside for a rainy day...

You don't trust the car salesman just because they said its a good deal. You don't trust an estate agent just because they said it's a good deal. Do you trust the credit salesman just because they said it's a good deal?

I am happy to compare them to children if the analogy is good enough. I never made the analogy but the poster that did maybe know more about the crisis than I do since I know pretty much nothing? But I am trying to learn and you seem to be saying nobody is to blame for such a catastrophe or perhaps what you are saying is that the people are responsible because they accepted loans, is this indeed correct?

armabelle

Eugene Norman wrote: »

It would be nice if we could sue economists but then there would be no economists.

economists don't make decisions on the economy IMO, they study them don't they?

armabelle

armabelle wrote: »

Are you making a joke?

Not at all, USC no protest, water charges lots of protest.

Who doesn't pay USC?

Mr. teddywinkles

The funny thing about this topic is if everyone bought property with cash instead of loans. The so called boom would still be going to this day and no one would have known the difference to this day. Which means everything is fine till the **** hits the proverbial fan.
People just want someone to blame then.

tommyhayes1989

I've done some work in the area and I think it boils down to a few major issues.

You can argue that the banks were very aggressive and over-lent to the property sector, but at the end of the day they were making serious money from it so in their eyes why would they stop. I'm not excusing their behavior but certainly you can see how they would be doing it.
Secondly, the financial regulator, who's main job, is to review and regulate the financial sector was wholeheartedly under performing, either by being ill-equipped or their own ineptitude. We would assume that if the FR had some teeth at any point they would have/should have intervened to do something at an earlier stage.
Finally, when everything blew up, Irish banks were over-exposed to property, with money they had borrowed short term from the ECB and Germany et al. They no had a short term funding problem with a load of loans that were beginning to defualt.

hmmm

Other people that should be held "accountable":
1. Public sector workers who looked for pay rises on the back of boom-era property taxes
2. All workers who were happy to see income tax cuts on the back of boom-era property taxes
3. Anyone on social welfare who accepted increases on the back of boom-era property taxes
4. Any pensioners who accepted pension increases on the back of boom-era property taxes
5. Anyone who used the phrase "rent is dead money"
6. Anyone who used the phrase "property ladder"

armabelle

Augeo wrote: »

Not at all, USC no protest, water charges lots of protest.

Who doesn't pay USC?

what is USC?

Eugene Norman

armabelle wrote: »

economists don't make decisions on the economy IMO, they study them don't they?

They are the experts though. Politicians aren't.

El_Duderino 09

armabelle wrote:

I am happy to compare them to children if the analogy is good enough. I never made the analogy but the poster that did maybe know more about the crisis than I do since I know pretty much nothing? But I am trying to learn and you seem to be saying nobody is to blame for such a catastrophe or perhaps what you are saying is that the people are responsible because they accepted loans, is this indeed correct?

I'm saying the second one. The people share the blame because they accepted loans that relied on their income staying extraordinary high for the term of the loan. They bet on the boom lasting. That's really silly but I don't think people accept their mistake and some people can't wait to make the same mistake again

Eugene Norman

Mr. teddywinkles wrote: »

The funny thing about this topic is if everyone bought property with cash instead of loans. The so called boom would still be going to this day and no one would have known the difference to this day. Which means everything is fine till the **** hits the proverbial fan.
People just want someone to blame then.

There was nowhere near enough cash to buy all those houses. If restricted to cash buyers the market would have been stalled long before peak.